On Monday, Vodafone and Idea Cellular that both are exploring the idea of a business merger which if successful will create the biggest telecom company of India. After the announcement, the Aditya Birla Group stock price rocketed sky high and closed at Rs 98, up by 26%.
The British telecom company stated that it is discussing an all share merger with Aditya Birla Group of Idea and Vodafone India. The company also stated that “Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating” and further stated that there is no certainty about the agreement of any transaction nor the timing and the terms.
Idea Cellular is a separate statement said that “The company constantly evaluates various opportunities for enhancing the stakeholders value. The company has been in preliminary discussions with Vodafone.”
The whole news has created quite a stir in the telecom industry and analysts are stating that such a merger would definitely help counter the competition of Reliance Jio. If the new deal comes into place then, Idea-Vodafone will have a subscriber base of 39 crore.